Archive for August, 2010
Titusville seeks rebirth through demolition
City officials want to demolish another vacant former apartment building to make way for new affordable housing, but they say acquiring the property might prove challenging. Titusville Planning and Growth Management Executive Director Courtney Barker has her sights on a 38-unit, two-story multifamily building at 1350 S. Deleon Ave., which the city is working to condemn. Because the property at one point was converted to condominium units, it has 35 owners, so acquiring the building on the 2.55-acre site could be "extremely difficult," Barker said. Using federal Neighborhood Stabilization Program funds, the city earlier this year tore down a nearby vacant apartment building on a 2.16-acre site at 1520 S. Deleon Ave., called Inspiration Point. It hopes to work out a deal with a developer to put affordable housing there. Barker thinks demolition at 1350 S. Deleon Ave. would make both sites more attractive for private development. The Rev. Glenn Dames Jr., senior pastor at St. James African Methodist Episcopal Church, told the city council he supports Barker's plan, which is designed to lead to new affordable housing for the neighborhood. "I am excited about the opportunity to revitalize a neighborhood that already is on the rise," said Dames, who also is president of the North Brevard branch of the NAACP. "This is a wonderful opportunity to clean up Titusville. It is the new hope of the community." Barker said 1350 S. Deleon Ave. -- also known as Deleon Village -- is blighted, uninhabitable and "severely dilapidated," missing many windows and doors, and needs "to be removed to make any revitalization project in the area successful."
When insurers stop writing insurance
If Hurricane Earl flirts with the Florida coast, many property insurers will stop writing new policies. That, in turn, impacts homebuyers who need insurance to finalize their mortgage. Without insurance, they can’t get mortgage money; and without mortgage money, they can’t close. Insurers have in-house rules about issuing new policies. For example, Florida’s property insurer, Citizens Property Insurance, stops writing policies in a wide area if a hurricane threatens. Some insurers rely on the National Weather Service to issue a storm watch or warning. If that happens, they stop writing policies in the potentially impacted areas. In all cases, a homebuyer heading to closing while a hurricane threatens should contact his or her property insurance carrier to determine that company’s rules.
Higher closing costs may not be
A new federal rule this year requiring mortgage lenders to give borrowers reliable estimates of closing costs appears to be working – whether it’s also costing borrowers more money is uncertain. A recent survey by Bankrate.com found that, on average, origination and third-party fees on a $200,000 purchase mortgage added up to $3,741 – a 37 percent jump over last year’s average of $2,739. The fees can include appraisals, credit reports, a closing or settlement attorney and surveys. Some housing experts say costs are rising because lenders have had to hire more staff to comply with the requirements of the Jan. 1 rule. That includes auditors, inspection experts and others who make sure estimates are accurate. “Lenders have had to hire compliance people,” David Leoncavallo, president of GFEazy, a Salt Lake City provider of compliance and other data for lenders. “To go up from $2,700 to $3,700 overnight is insane. Consumers should be upset.” But others say closing costs haven’t gone up. Rather, they say, the estimates simply seem higher because they more accurately reflect actual costs that buyers pay. “Before, it wasn’t an accurate assessment of closing costs,” says Tim Dwyer, president of Entitle Direct, a direct-to-consumer title insurance service. “Now, it’s a more accurate portrayal. Actual closing costs have not increased. The estimates have gotten closer to the actual costs.” The good-faith estimates also are aimed at protecting consumers by ensuring that lenders don’t lowball the numbers, says Vicki Bott, deputy assistant director of the Department of Housing and Urban Development. “Consumers get more accurate estimates upfront,” she says. “It’s not an increase in closing costs.” One reason lenders are ensuring accurate estimates is that, in many cases, they must now make up the difference between the estimate provided and the actual total. Denis Orloff, a sales associate with Rhodes Van Note & Co. Realtors, says fees have risen because more people are needed to process the same number of loans. He estimates borrowers pay $800 to $1,500 more than two years ago to have their mortgage application processed. Bob Davis, executive vice president at the American Bankers Association, says some costs have gone up because it takes more time for lenders to comply with the estimates. He also says new estimates have to be issued if, for example, the terms of a loan change. “It’s true the new requirements are more complicated and take more time to comply with,” Davis says. “Anything that takes more time and effort adds an element of cost, but it’s not significant.” © Copyright 2010 USA TODAY
5 reasons homeownership trumps renting
The seemingly endless run of bad housing news is discouraging some potential homebuyers from considering a purchase. But the truth is that the advantages of homeownership have very little to do with investment gains, and a lot to do with personal comfort and satisfaction. Here are five of them: • Be your own landlord. The bank can only kick you out if you don’t pay; a landlord can be much less dependable – deciding to sell the property or choosing to live there themselves. • Paying the principal is forced savings. Yes, it’s possible that home prices will fall further. It is also possible that your 401(k) will lose value. But over the long haul, both are likely to enjoy modest gains in value. • Fixed-rate mortgages never rise – and eventually you pay them off. With mortgage rates at record lows, people who buy now are locking in real bargains. • Good schools. Family-sized rentals are harder to come by in areas with excellent public schools. • Spacious properties in pleasant neighborhoods. Sizable homes in attractive communities are almost always owned – not rented. Source: The New York Times, Ron Lieber
Could we see another buyer tax credit?
Housing and Urban Development Secretary Shaun Donovan said Sunday on CNN’s “State of the Union” that the administration would “do everything we can” to stabilize the U.S. housing market. “The July numbers were worse than we expected, worse than the general market expected, and we are concerned,” Donovan said. “That’s why we are taking additional steps to move forward.” Whether HUD will resurrect the first-time homebuyer tax credit is up in the air. “All I can tell you is that we are watching very carefully,” Donovan said on the show. “We’re going to be focused like a laser on where the housing market is moving going forward, and we are going to go everywhere we can to make sure this market stabilizes and recovers.” Gov. Charlie Crist appeared on the same show and supported a new version of the homebuyer tax credit, saying it would “help enormously,” noting that Florida has the nation’s third highest foreclosure rate. Donovan also said the Federal Housing Administration will launch an emergency loan program to help unemployed borrowers stay in their homes and a program to help underwater borrowers refinance. Source: Bloomberg, Holly Rosenkrantz
Americans’ economic confidence ticks up slightly
Americans’ confidence in the economy improved slightly in August, but the mood is still gloomy amid job worries, according to a monthly survey. The Conference Board said Tuesday that its Consumer Confidence Index now stands at 53.5, up from a revised 51.0 in July. Economists surveyed by Thomson Reuters had expected 50.5. The increase comes after two straight months of declines. It takes a reading of 90 or more to indicate a healthy economy – a level not reached since the recession began in December 2007. The index – which measures how Americans feel about business conditions, the job market and the next six months – had been recovering fitfully since hitting an all-time low of 25.3 in February 2009. But August’s reading suggests that American confidence hasn’t improved from a year ago, a bad sign for the economy and for retailers, which have been grappling with a weak start to the back-to-school season. Economists watch confidence closely because consumer spending accounts for about 70 percent of U.S. economic activity and is critical to a strong rebound. But worries are rising the economy is growing too slowly to support sustained job growth, and some are concerned it could fall back into a recession. “The comfort in (August’s confidence figures) is that confidence did not fall further,” Paul Dales, U.S. economist at Capital Economics, said in a statement. “But there are few signs that households will ramp up their spending. High unemployment, widespread negative housing equity and low share prices are keeping households on the sidelines.” Still, investors, bombarded by piles of bad news about the economy, seized on the bigger than-expected increase in August’s confidence figure. The Dow Jones industrial average is up 22, or 0.2 percent, at 10,032 Tuesday morning. The S&P 500 is up 1, or 0.1 percent, at 1,050. Stocks have been pummeled throughout the month because of uncertainty over signs of slowing growth. Meanwhile, a widely watched home price index reported that home prices rose in June for a third straight month as now-expired tax credits inspired a burst of homebuying. But prices are expected to fall through the rest of the year now that demand has faded. The slight improvement in August’s Consumer Confidence Index was boosted by shoppers’ improved outlook over the next six months. That gauge rose to 72.5 from 67.5. The other, which measures how consumers feel now about the economy, decreased to 24.9 from 26.4. “Expectations about future business and labor market conditions have brightened somewhat, but overall, consumers remain apprehensive about the future,” said Lynn Franco, director of The Conference Board Consumer Research Center in a statement. New figures issued Friday show the economy is weaker than expected, and the outlook for the rest of the year is looking bleaker. The Commerce Department reported that gross domestic product grew at a 1.6 percent rate for April through June. The initial estimate was 2.4 percent. Home sales are plunging, and consumers are saving more and spending less as the unemployment rate remains stuck at almost 10 percent. The Standard & Poor’s/Case-Shiller 20-city home price index released Tuesday posted a 1 percent increase in June from May and was up 4.2 percent from a year ago. Home prices nationally were up 4.4 percent in the second quarter compared with the first quarter. That was largely because buyers could take advantage of government tax credits of up to $8,000. Home sales have dropped sharply since those incentives expired. Lending standards remain tight, and unemployment is stuck near 10 percent. Last week, the National Association of Realtors said sales of previously occupied homes in the U.S. fell 27 percent in July, the weakest showing in 15 years. It marked the largest monthly drop in the four decades that records have been kept. Meanwhile, the Commerce Department reported that sales of new homes fell 12.4 percent in July from a month earlier. July’s pace was the slowest in at least 47 years. Economists will closely watch Friday’s reading on job figures for August, but they’re bracing for more bad news. Economists surveyed by Thomson Reuters expect overall nonfarm payrolls to drop 100,000 jobs in August, dragged down by government cutbacks on the state and local level. Private employers were expected to add 54,000 jobs, which would mark the fourth straight month of tepid gains. Given the scenario, the unemployment rate is slated to tick up to 9.6 percent from 9.5 percent. Against this background, consumers are waiting for the best deals and buying fashions that they can wear right away for the fall season. And stores don’t expect shoppers to start spending anytime soon. The Conference Board survey, based on a random survey mailed to 5,000 households from Aug. 1 to Aug. 24, showed shoppers remain worried about jobs. Those saying jobs are “hard to get” increased to 45.7 percent from 45.1 percent, while those claiming jobs are “plentiful” declined to 3.8 percent from 4.4 percent. Those expecting more jobs in the months ahead increased to 14.6 percent from 14.2 percent, while those anticipating fewer jobs decreased to 19.4 percent from 20.9 percent. Copyright © 2010 The Associated Press, Anne D’Innocenzio, AP retail writer. AP Real Estate Writer Alan Zibel in Washington contributed to this report
Things To Do in Central Florida
Central Florida is the largest region in the state of Florida, also known as Greater Orlando. In Central Florida you can find cities like Orlando, Kissimmee, Daytona Beach, and Tampa including Orange, Osceola, Seminole, Lake, Brevard, and Volusia Counties. When you plan on visiting Central Florida, it is recommended that you try different activities in and outside the Orlando. America's family fun capital, Orlando is home to Walt Disney World, Sea World and other famous mega-theme parks, including Discovery Cove, Islands of Adventure and Universal Studios. There's more going on in the city than just Mickey and Goofy and the gang though. Once you've had your fill of the theme parks, you will also be able to choose from several outstanding golf courses in the area, a family-friendly science center, plenty of entertainment options and a fine art museum. There's just so much to do in Orlando that you can't do it all in a week. So plan a long stay or several short stays to experience all the exciting activities. Is Orlando the only city you could enjoy in the whole state of Florida? Of course not! Tampa is also one of the best places to do fishing and beach activities. Three of the 10 best beaches in the city are just minutes away. Those are -Tierra Verde/Isla Del Sol, Pass-a-Grille Beach, St. Pete Beach, Treasure Island, Madeira Beach, Redington Beach, North Redington Beach, Redington Shores, Indian Shores, Indian Rocks Beach, Belleair Shores, Belleair Beach and Clearwater Beach. You can also choose to stay in Daytona Beach. Daytona Beach is a year-round family-friendly resort area, but could also accurately be called a seasonal town, with large groups of out-of-towners descending upon the city for various events like Bike Week, Spring Break Week, Black College Reunion Week, and Speed Weeks. There are lots of things to do in Daytona Beach, which makes getting bored here virtually impossible. Every year, waves of tourists pour into the Daytona Beach area, and many are looking to enjoy plenty of fun in the sun. This coastal city boasts a wealth of attractions, and if you are up for some activity, it won't disappoint. The possible activities in Daytona Beach cover a wide range of tastes and preferences, and families will be happy to know that the city is more family friendly than ever, with the recent additions of the Oceanwalk Shoppes (restaurants, bars, surf shops and more) and the Daytona Lagoon, a premier water park and entertainment complex. Trips to the local museums are definitely worth adding to your Daytona Beach activities list, especially if you're interested in history, art, and science. The Museum of Arts and Sciences is arguably the best museum in the immediate area, and you can fill a few hours here with ease. Another museum that you won't want to miss is the Halifax Historical Museum, not to mention the Southeast Museum of Photography. There are really a lot of amazing and fun activities you can around Central Florida. Check out our 1000 Things to Do in Central Florida FaceBook Fan page to see what residents and tourists are doing right now!
Feds: Economy edges closer to stalling
The economy turns out to be weaker than we thought, and the outlook for the rest of the year is now looking dimmer. New figures issued Friday show the economy struggled this spring, growing at a meager 1.6 percent annual pace. The initial estimate was 2.4 percent, and even that was anemic. Analysts say the summer should be disappointing, too. Shortly after the government’s revision, Federal Reserve chief Ben Bernanke said the Fed was ready to take additional steps to prevent a second recession if the economy deteriorates further. But he stopped short of promising any action. The Fed “will do all that it can to ensure continuation of the economic recovery,” he said. Several economists said they expected the economy to keep growing slowly for the rest of the year. That would almost certainly not be enough to bring down the jobless rate, already at 9.5 percent, and unemployment could actually increase. The performance is “very disappointing,” said Ethan Harris, an economist at Bank of America-Merrill Lynch. “Usually you get a bigger bounceback.” In the first quarter of the year, the economy grew much faster, at a 3.7 percent pace. Since then, though, the housing market has slumped after the expiration of a homebuyer tax credit, and business spending and manufacturing activity are both cooling off. Bernanke, speaking to a Fed conference in Jackson Hole, Wyo., acknowledged the economy has slowed more than policymakers had anticipated and said it is “vulnerable to unexpected developments.” He did say he expects growth will pick up next year. The central bank chairman also sought to reassure the financial markets that he has the tools needed to bolster the economy and will use them if business activity slows further. Bernanke outlined several options, including having the Fed buy more securities, most likely government debt or mortgage investments, as a way to drive down interest rates on all sorts of debt and spur more spending that might get the economy going. Bernanke made clear “he is willing to act to ensure that the recovery remains on the right path,” said Zach Pandl, an economist at Nomura Securities. That reassured the financial markets, which rose sharply after the Fed chairman’s speech. The Dow Jones industrial average finished 164 points higher and back over 10,000, and broader markers registered solid gains. Wall Street looked past a disappointing statement from computer chip maker Intel, which said it was cutting its sales forecast for the quarter after sensing weaker demand from customers in the U.S. and Europe. A little more than a month ago, Intel reported its biggest quarterly profit in a decade. How much the government could help at this point is an open question. The Fed has already lowered its key short-term interest rate to nearly zero, but that has yet to rejuvenate the economy. The benefits of federal stimulus programs are fading, and Congress has declined to pass any major new aid. Bernanke said the prospect of high unemployment for a long period is a central concern for the Fed. He also made clear that he is determined to prevent the United States from slipping into a deflationary spiral – a prolonged drop in wages and prices. The Fed chief said the foundation is being laid for stronger growth in 2011: Households are saving more and healthier banks are more willing to lend. That should boost consumer spending, which makes up 70 percent of U.S. economic activity. Corporate profits and personal incomes also rose in the second quarter, noted Rebecca Blank, undersecretary for economic affairs at the Commerce Department. “There is some good news here,” she said. “Those are the things that will fuel a longer-term recovery.” Still, the report for April to June showed that economic growth was reduced by a surge of imports in June and a smaller buildup in business inventories than previously estimated. Without the trade deficit, the economy would have grown at a healthy 5 percent pace. Instead, the gap essentially subtracted 3.4 percentage points, the biggest hit from a trade imbalance since 1947. Business investment in new machinery, computers and software rose nearly 25 percent, driving much of the growth last quarter. But much of that spending was on goods from other countries – a 32 percent increase in imports, the most since 1984. Bernanke and many private economists seem to think that was mostly an aberration. As businesses pare back their spending on inventories and reduce investment in new equipment, imports should decline and come more into alignment with exports, they say. Americans personally spent a bit more in the second quarter than previously calculated. Their spending rose at a 2 percent annual rate, above the 1.6 percent estimated last month. The government’s report measures the gross domestic product, which covers goods and services from autos to haircuts. Friday’s report is the second of three estimates the government makes each quarter. Copyright 2010 The Associated Press, Christopher S. Rugaber, AP Economics Write
Small businesses sit in holding pattern
Small businesses have put hiring, supply buying and real estate expansion on hold as they wait out the vote on a small-business-aid bill that stalled in the Senate earlier this summer. The much-debated legislation offers tax breaks and waived loan fees. But it also comes with more divisive components, such as a $30 billion fund that would help community banks give loans to small businesses. Opponents say the fund would be a mini version of the often-criticized TARP large-bank bailout program. Many small businesses had hoped the legislation would pass the Senate by the end of July. With two weeks left until Congress reconvenes, those firms are in a holding pattern. “I’m still waiting for Congress to sign off on the bill,” says Amarjit Kaur, who runs a convenience store and gas station in Wood Village, Ore. She leases her property but has a chance to buy it. With the waived-fee provision, Kaur says she could save about $35,000 on her pending loan. Kaur’s is among about 1,000 other small businesses that “have their bank papers all done and will be funded in the days – moments – after the bill passes,” says U.S. Small Business Administration Administrator Karen Mills. In Kaur’s case, she’s concerned that the property seller is going to get antsy as she waits out the political decision-makers. “I keep asking my seller if he can give me a couple more weeks,” she says. Many other businesses have paused expansion as they wait for the outcome of the bill, says Bob Coleman, publisher of the Coleman Report, which provides information on small-business lending. Some businesses can save thousands of dollars on the waived loan-fee provision alone, and they are thinking, “ ‘I might as well hold off and save the money,’ “ he says. What’s in the bill: • An increase on government guarantees to as much as 90 percent on some of the most popular loans. That would mean a little less pressure on banks if a company defaults, because the government would insure a larger percentage of the loan, says Coleman. With current guarantees topping out at 75 percent, “there is a bit more exposure” for banks, he says. • Community banks with assets of $10 billion or less would be able to tap into the $30 billion fund when making small-business loans. About 8,000 banks would be eligible. • Small businesses would get about $18 billion in tax breaks, such as larger write-offs on capital equipment investments, and get credits for new hires. • The SBA would be able to increase the maximum for certain loans to $5 million from $2 million.
HUD awards $312M in disaster recovery grants
The U.S. Department of Housing and Urban Development (HUD) awarded nearly $312 million to 13 states to reduce the human, physical and economic toll of future disasters. The grants are provided through HUD’s Disaster Recovery Enhancement Fund (DREF) encourage states to undertake activities and long-term strategies that focus on reducing damages from future natural disasters. Florida is one of the grant states and will receive $26,616,675. “An ounce of prevention today can spare communities a world of hurt tomorrow,” says HUD Secretary Shaun Donovan. “We’re making a serious investment in our future by making certain that when disaster strikes, the impacted communities in these states can weather the storm.” According to an independent study by the National Institute of Building Sciences, every dollar spent on disaster mitigation activities saves taxpayers $4 in future disaster recovery expenses. The 13 states that received funding through the DREF invested nearly $876 million in disaster mitigation, which, according to HUD, translates into a total anticipated return on investment of more than $3.5 billion. DREF funds can be used toward projects meeting unmet disaster recovery needs, including: • Buyout payments for homeowners living in high-risk areas • Optional relocation payments to encourage residents to move to safer locations • Home improvement grants to reduce damage risks (property elevation, reinforced garage doors and windows, etc.) • Improving and enforcing building codes • Developing forward-thinking land-use plans that reduce development in high-risk areas.
